Strong first-half result for ASB

The ASB financial result for the six months ended
December reflected a strong performance across the bank with
all divisions making a contribution, chief executive Barbara
Chapman said.

The Commonwealth Bank of Australia-owned ASB reported net
interest earnings for the period of $771 million, up 12.1%
from the previous corresponding period.

Total operating income was up 10% to $984 million and the
''statutory profit'', the one favoured by most analysts, was
up 8.5% to $416 million in the six months.

Mrs Chapman said the ASB's wealth and insurance business saw
revenue growth of 19% in the period under review and there
was a 30% growth in KiwiSaver funds under management.

''The momentum we have maintained over the first half of the
financial year is a product of better market conditions as
well as continued success in executing our strategy, focusing
on customers and improving the productivity of our
business.''

The needs of customers were rapidly evolving and ASB had
remained committed to leading the market with innovative
products and services developed with the goal of making
banking with ASB simple, straightforward and seamless, she
said.

''The essence of ASB's success is that we constantly look
through the lens of the customer to find opportunities to
make banking better.''

The bank had seen strong growth in customer advances across
all portfolios of 7% since December 2012. Customer deposits
increased 10%, driven by a ''particularly strong''
performance in retail deposits, Mrs Chapman said.

''Growth in customer deposits has been stimulated by
investment in customer product offerings combined with
stronger demand as customers focus on building wealth and
protecting assets.''

Income growth of 10% was partly offset by an increase in
operating expenses of 8%, resulting in an improved
cost-to-income ratio of 39.3%.

As the New Zealand economy improved, loan impairment expenses
reduced by 25% against the corresponding period last year,
she said.

Morningstar banking analyst David Ellis said ASB parent CBA
continued to deliver strong earnings growth with an
impressive first-half cash profit of $A4.25 billion ($NZ4.6
billion), exceeding expectations and up 14% on the pcp.

The 12% lift in the tax-paid interim dividend of $A1.83 a
share would please the legion of retail investors.

''Most importantly, there are no ominous signs of impending
danger in the result, just another strong and consistent
performance building on a long and enviable track record of
steadily increasing profits and dividends,'' he said.